Capital Essence’s Market Outlook for January 23, 2008. Daily Market Outlook is the technical analysis of financial markets. Features Technical Analysis, Trend Prediction, Stock Picks, Option Strategies. It designs to help investors to understand how to time the market, when to entry, when to exit, how to pick undervalued stocks, how to limit investment risk with right strategies.

like a rubber band, stocks tend to snap back to the mean if they’ve dropped too far from the “fair” value. With that said, if lower stock prices create some values for investors, then, given everything being equal, the market should be able to find some buyers. However, the upside potential seems to be limited, at least for the time being, for it might take quite a bit of time to repair the significant damage that had been done over the past couple of months before we can start to think about getting back to last year’s highs. As always we must stress that a failure to bounce after last week steep decline indicates that real demand did not return and we could, therefore, argue that this bear market is going to have some legs